Hana Financial Group Reports Q3 Net Profit of 760.1 Billion KRW, Down 9.15% YoY

Cumulative Net Profit of 2.1061 Trillion Won This Year
3.2% Increase Compared to Same Period Last Year
Hana Bank Earns 591.4 Billion Won in Q3
Non-Banking Sector Drives Performance

[Asia Economy Reporter Kim Min-young] Hana Financial Group achieved a net profit of 760.1 billion KRW in the third quarter of this year. This represents a 9.15% decrease compared to the same period last year (836.6 billion KRW), but a 10.3% (71.1 billion KRW) increase compared to the previous quarter. The cumulative net profit on a consolidated basis for this year reached 2.1061 trillion KRW, a 3.2% (65 billion KRW) increase compared to the same period last year.

Hana Financial explained, "This result was achieved despite unfavorable external conditions such as the impact of the novel coronavirus disease (COVID-19), thanks to the advancement of the non-bank sector and the expansion of the business base of non-face-to-face channels." The contribution of the non-bank sector to the cumulative net profit was 31.3%, amounting to 659.7 billion KRW.

They delivered good results even though they had prepared in advance for the possibility of economic contraction due to COVID-19. Hana Financial's cumulative provisions, including 172.8 billion KRW set aside in the third quarter, reached 698 billion KRW. The company explained that, following the second quarter, they conservatively re-evaluated future outlook information reflecting the COVID-19 economic situation in the third quarter as well, recognizing an additional loan loss provision of about 58 billion KRW.

Accordingly, as of the cumulative third quarter, they secured sufficient loss absorption buffers to respond to future uncertainties, including 349.4 billion KRW of ordinary loan loss provisions, 221 billion KRW of additional COVID-19 loan loss provisions, and 118.5 billion KRW of reserves related to private equity funds set aside in the second quarter.

Asset soundness also remained at a stable level. The non-performing loan (NPL) ratio at the end of the third quarter was 0.41%, improving by 4 basis points (bp) compared to the end of the previous quarter (1bp = 0.01 percentage point), and the delinquency ratio fell by 4bp to 0.27% compared to the previous quarter.

Profitability also improved. The key management indicator, return on equity (ROE), rose by 21bp from the previous quarter to 9.66%, and return on assets (ROA) increased by 3bp to 0.66% compared to the previous quarter.

The group's estimated Basel III Common Equity Tier 1 (CET1) ratio increased by 29bp from the previous quarter to 14.36%, and the estimated common equity tier 1 capital ratio rose by 4bp to 12.07%. The group's net interest margin (NIM) recorded 1.58%, down 4bp from the previous quarter. As of the end of the third quarter, the group's total assets, including trust assets of 134 trillion KRW, amounted to 578 trillion KRW.

The core affiliate, Hana Bank, posted a cumulative consolidated net profit of 1.6544 trillion KRW for the third quarter.

This figure represents a 7.6% (136.9 billion KRW) decrease compared to the same period last year, which the company explained was due to the disappearance of last year's major one-time gain from the sale of the Myeongdong building.

The third quarter net profit was 591.4 billion KRW, down 22.18% (169.1 billion KRW) from 762.2 billion KRW in the same period last year, but up 16.3% (83 billion KRW) compared to the previous quarter.

The bank's core earnings for the third quarter cumulative period, combining interest income (3.9909 trillion KRW) and fee income (556.8 billion KRW), reached 4.5477 trillion KRW, a 4.3% (201.9 billion KRW) decrease compared to the same period last year.

Hana Bank's NPL coverage ratio at the end of the third quarter increased by 3.9 percentage points from the previous quarter to 124.8%. The NPL ratio at the end of the third quarter was 0.34%, down 1bp from the end of the previous quarter, and the delinquency ratio also fell by 1bp to 0.20%, maintaining stable asset soundness.

Despite COVID-19, non-bank affiliates achieved good results. Hana Financial Investment posted a consolidated net profit of 288 billion KRW for the third quarter cumulative period, a 36.2% (76.6 billion KRW) increase compared to the same period last year, driven by increased fee income. This is attributed to the stock investment boom led by individual investors known as Donghak Ants.

The secondary financial sector also performed well. Hana Card recorded a cumulative consolidated net profit of 114.4 billion KRW, up 129.6% (64.6 billion KRW) compared to the same period last year, due to increased credit card fees.

Hana Capital posted a cumulative consolidated net profit of 127.1 billion KRW, a 65.2% (50.1 billion KRW) increase compared to the same period last year, supported by growth in interest income from increased interest-bearing assets. Hana Life Insurance recorded 25.7 billion KRW, up 49.1% (8.5 billion KRW), and Hana Asset Trust posted 65.7 billion KRW, up 37.0% (17.8 billion KRW) in cumulative consolidated net profit compared to the same period last year.

This content was produced with the assistance of AI translation services.